[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.509(b)-1]

[Page 139-140]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.509(b)-1  Continuation of private foundation status.

    (a) In general. If an organization is a private foundation (within 
the meaning of section 509(a)) on October 9, 1969, or becomes a private 
foundation on any subsequent date, such organization shall be treated as 
a private foundation for all periods after October 9, 1969, or after 
such subsequent date, unless its status as such is terminated under 
section 507. Therefore, if an organization was described in section 
501(c)(3) and was a private foundation within the meaning of section 
509(a) on October 9, 1969, it shall be treated as a private foundation 
for all periods thereafter, even though it may also satisfy the 
requirements of an organization described in some other paragraph of 
section 501(c). For example, if on October 9, 1969, an organization was 
described in section 501(c)(3), but because of its activities, it could 
also have qualified as an organization described in section 501(c)(4), 
such organization will continue to be treated as a private foundation, 
if it was a private foundation within the meaning of section 509(a) on 
October 9, 1969.
    (b) Taxable private foundations. If an organization is a private 
foundation on October 9, 1969, and it is determined that it is not 
exempt under section 501(a) as an organization described in section 
501(c)(3) as of any date after October 9, 1969, such organization, even 
though it may operate thereafter as a taxable entity, will continue to 
be treated as a private foundation unless its status as such is 
terminated under section 507. For example, X organization is a private 
foundation on October 9, 1969. It is subsequently determined that, as of 
July 1, 1972, X is no longer exempt under section 501(a) as an 
organization described in section 501(c)(3) because, for example, it has 
not conformed its governing instrument pursuant to section 508(e). X 
will continue to be treated as a private foundation after July 1, 1972, 
unless its status as such is terminated under section 507. However, if 
an organization is not exempt under

[[Page 140]]

section 501(a) as an organization described in section 501(c)(3) on 
October 9, 1969, then it will not be treated as a private foundation 
within the meaning of section 509(a) by reason of section 509(b), unless 
it becomes a private foundation on a subsequent date.

[T.D. 7212, 37 FR 21924, Oct. 17, 1972]